Forbearance Agreements

News & Analysis as of

“Deed in Lieu”: Deed That Is Not Really In Lieu Of Foreclosure Will Likely Not Be Treated As a Deed

In re Primes, 518 B.R. 466 (Bankr. N.D. Ill. 2014) – A mortgagee moved for relief from the automatic stay, arguing that it acquired title to property prior to the bankruptcy under a quit claim deed given to it by the...more

Forbearance Agreements Must Be In Writing

Many plaintiffs in wrongful foreclosure lawsuits attempt to rely, at least in part, on what the lender’s representative “told them” over the phone or in person. But a recent decision by the California Court of Appeal...more

Forbear or Beware: Are Forbearance Agreements the Solution to California Creditors' Nightmares?

In commercial and real estate disputes, the creditor oftentimes agrees to settle his claim for a discounted amount payable in fixed installments over time, but, at the same time, the creditor requires the debtor to secure its...more

Attorney Fees: Following Local Law Can Mean the Difference Between Collecting or Not

Southside, LLC v SunTrust Bank (In re Southside, LLC), 520 B.R. 914 (Bankr. N.D. Ga. 2014) – A debtor objected to attorney fees included in the proof of claim filed by a mortgagee, and the mortgagee moved for relief...more

Money, Dirt & Steel: 2014-2015 NC Real Property Litigation Update

A snapshot of noteworthy cases from the past year related to lending practices, property rights and construction in North Carolina. Money - Lending: Comprehensive waiver language in loan workout...more

No Change Of Position, No Estoppel

Under California Law, a party seeking to defeat the statute of frauds based on promissory estoppel must allege an actual change in position. In Jones v. Wachovia Bank, 230 Cal.App.4th 935 (2014), the California Court of...more

Prepetition Stay Waivers: Which Way Is The Wind Blowing?

In re Triple A & R Inv., Inc., 519 B.R. 581 (Bankr. D. P.R. 2014) – A mortgagee moved for relief from the automatic stay based on the debtor’s prepetition consent to stay relief.  The debtor argued that a prepetition waiver...more

North Carolina Supreme Court Upholds Enforceability of Waiver of ECOA Claim

Last month, the North Carolina Supreme Court issued an important opinion for lenders in this state. The opinion reversed the North Carolina Court of Appeals’ decision in RL REGI N.C., LLC v. Lighthouse Cove, LLC, which found...more

N.C. Supreme Court Issues Significant Ruling On Commercial Forbearance Agreements and Spousal Guaranties

On August 20, 2014, the North Carolina Supreme Court issued an opinion giving great weight to properly-drafted forbearance agreements in a commercial loan and guaranty context. RL REGI N.C., LLC v. Lighthouse Cove, LLC, No....more

North Carolina Supreme Court Clarifies the Enforceability of Waivers and Releases of Claims and Defenses in Forbearance Agreements

On August 20, 2014, the North Carolina Supreme Court issued an opinion clarifying the enforceability of waivers and releases of claims and defenses granted by borrowers and guarantors in forbearance agreements. RL REGI N.C.,...more

Fannie Mae Updates Unemployment Forbearance Policies

On June 4, Fannie Mae issued Servicing Guide Announcement SVC-2014-10, which updates policies related to unemployment forbearance. The announcement states that, effective immediately, a servicer may approve a borrower for the...more

Freddie Mac Announces Numerous Servicing Policy Updates

On June 3, Freddie Mac announced revisions to numerous servicing policies, including policies regarding, among other things, short sales and deeds-in-lieu of foreclosure (DILs), the CFPB’s mortgage servicing rules, and...more

Delaware Bankruptcy Court Denies Derivative Standing to Creditor Seeking Recharacterization

In that case, Walnut Creek Mining Company (“Walnut Creek”), the debtor Optim Energy’s largest unsecured creditor, sought standing to pursue recharacterization, equitable subordination, and fiduciary duty claims on behalf of...more

Select Bankruptcy Issues for General Counsel – Part One [Video]

Part one of an in-depth webinar discussion covering a range of bankruptcy issues of particular interest to In-House Counsel. The panel discusses bankruptcy and other creditor rights considerations when choosing the form of...more

California Appeals Court Holds Judgment Creditor’s Forbearance Fees Not Subject To State Usury Law

On April 25, the California Court of Appeal, First District, held that California’s usury law does not prohibit a judgment creditor from accepting a forbearance fee to delay collecting on a judgment. Bisno v. Kahn, No....more

HUD Clarifies Changes To HECM Program, Updates FHA Loss Mitigation Home Retention Options

On September 25, HUD issued Mortgagee Letter 2013-33, which clarifies the recent changes HUD made to its HECM program earlier this month through Mortgagee Letter 2013-27. The new letter (i) defines mandatory obligation, (ii)...more

ECOA Gets More Teeth in North Carolina

In one of my prior “Drive Thrus” in Community Banking Exellence, I reminded everyone that lenders can never require a spousal guaranty, but can request one. The North Carolina Court of Appeals brought that fact home recently...more

CFPB Finalizes Additional Modifications To Certain Mortgage Rules

On September 13, the CFPB issued final amendments to its Mortgage Servicing and Loan Originator Compensation rules. The CFPB’s press release states that the amendments (i) clarify what servicer activities are prohibited in...more

Fannie Mae Announces Miscellaneous Servicing Policy Changes.

On August 28, Fannie Mae issued Announcement SVC-2013-17, which describes miscellaneous servicing policy changes and updates. The announcement provides that a servicer is no longer obligated to treat a servicer name change as...more

Federal Banking Agencies Encourage Student Loan Forbearance

Federal bank regulators are recognizing the plight of student loan borrowers who are unemployed or underemployed and may not be able to begin repaying their private student loan debt shortly after leaving school....more

HUD Updates Pre-Foreclosure And Deed-In-Lieu Of Foreclosure Requirements, Extends Unemployment Forbearance

On July 9, HUD issued Mortgagee Letter 2013-23, which updates pre-foreclosure sale (PFS) and deed-in-lieu (DIL) foreclosure requirements for FHA-approved mortgagees....more

New California Supreme Court Case Opens Door to Attacks on Contracts

For the past 70 years, California courts have held that a party is barred from claiming fraud based on an alleged oral misrepresentation that directly contradicts the express terms of a written agreement. This rule had long...more

California Supreme Court Eliminates Lender Defense to Borrower Fraud Claims

On January 14, the California Supreme Court issued its opinion in Riverisland Cold Storage v. Fresno-Madera Production Credit Assn., which takes away a lender defense to borrower fraud claims and will therefore have a...more

Sell the Company as the “Exit” Strategy? Tips on the Forbearance Agreement

The “forbearance” agreement between a lender and a borrower is an important piece of an orderly sale of a company (as it sells all of its assets and pays creditors). Whether you’re the creditor or the company, a thoughtful...more

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